Aspen Insurance Holdings has admitted a preliminary estimate of approximately $135 million in pre-tax losses, net of reinsurance and reinstatement premiums, for the fourth quarter of last year.
The company said that the losses were mostly from the California wildfires in October and December 2017. The estimated losses are predominantly attributed to Aspen’s reinsurance segment.
Aspen announced that it expects to record an underwriting loss of approximately $245 million in the fourth quarter of 2017. These results reflect the natural catastrophe losses described above as well as an increased frequency of mid-sized and attritional losses primarily in Aspen’s Insurance segment. These include property and fire-related losses in the UK and the US and, to a lesser extent, cyber losses and an increase in a previously reported surety loss. Aspen's reserves for losses and loss adjustment expenses remain strong and the expected fourth quarter 2017 underwriting loss includes a release of reserves from prior years.
“We are deeply disappointed with our financial performance in 2017,” said Chris O’Kane, chief executive officer. “We have taken a number of actions to improve our underwriting performance and expect to see the impact of these reflected in our 2018 underwriting year results and beyond. We believe our capital position is appropriate to support our ongoing business and underpins our financial strength ratings.”
Aspen will release its updated loss estimates and full operating results for the fourth quarter of 2017 in its fourth quarter 2017 financial results, which will be announced on February 7, 2018.
The company also stressed that the preliminary Q4 2017 loss estimates of losses involve the exercise of considerable judgment and are based, among other factors, on a review of the individual treaties and policies expected to be impacted, information available to date from clients and brokers, market intelligence, initial loss reports, modeled loss projections and exposure analysis.
Aspen added that due to the complexity of losses from natural catastrophes and the uncertainty associated with Aspen’s assumptions and the preliminary information used to prepare these estimates, its actual losses from these natural catastrophes may differ materially from the preliminary estimates.